HUL Exploring Diverse Paths For Indian Ice Cream Business

When asked about the potential ramifications of this development on its Indian operations, Unilever's Indian subsidiary, Hindustan Unilever, stated that it is actively examining various alternatives

Hindustan Unilever said on Tuesday that it is evaluating different pathways for the future trajectory of its ice cream business, aligning with its parent company Unilever's declaration of a strategic objective to segregate the vertical on a global scale. Unilever, headquartered in London, unveiled its intention to streamline its operations into a more streamlined, focused, and high-performing entity by divesting its ice cream business, a decision anticipated to result in the elimination of 7,500 positions. 

When asked about the potential ramifications of this development on its Indian operations, Unilever's Indian subsidiary, Hindustan Unilever, stated that it is actively examining various alternatives.

"As far as the Indian ice cream business is concerned, we are evaluating the various options in light of this announcement. We will discuss this with the HUL Board and Unilever management in the coming months. Once the approach is finalised, we will communicate further," a HUL spokesperson told the news agency PTI in response to a query regarding the impact which Unilever’s decision will have on Indian business.

In the fiscal year 2023, ice creams accounted for 3 per cent of HUL's revenue, equivalent to Rs 59,144 crore.

"We have a very robust cost savings programme in HUL called Symphony, that we have been driving for many years now. Through an end-to-end focus across all lines of the P&L (profit and loss), we have been generating gross savings...every year. This provides us with crucial fuel for growth, allowing us to invest competitively behind our brands and future capabilities. We will closely assess the global initiatives of Unilever under the productivity programme and assimilate best practices to take Symphony to its next phase," the spokesperson said in the report.

The HUL spokesperson highlighted that the ice cream business operates under a distinct business model characterised by a cold-chain go-to-market approach, seasonality factors, and a unique innovation rhythm compared to other segments within Unilever.

Within the Indian ice cream market, HUL manages three prominent brands: Magnum, Kwality Walls, and Cornetto. HUL's ice cream business falls under the Food and Refreshment segment, contributing 25 per cent of its revenue.

In its recent annual report, Unilever praised the stellar performance of its ice cream business, attributing it to strong innovation and execution strategies.

The success of its ice cream business has bolstered the overall performance of HUL's Foods and Refreshment division in FY23, alongside its Foods and Coffee categories. To expand the ice cream category, HUL has focused on "de-seasonalise" consumption patterns through innovative campaigns and introducing exclusive products tailored around Indian festivals.